Wednesday, April 28, 2010

Funeral costs have survived recession's deflationary grip

Elaborate caskets made out of hand-carved oak and sturdy brass are stacked alongside chipboard boxes with plastic adornments.

The bereaved are shown what’s what by softly spoken undertakers and have to decide almost immediately on how much they want to spend.

The price differential between a top-of-the-range coffin and a cheap-as-woodchip model can run to many thousands of euro but snagging a bargain is rarely on the buyers’ minds.

In fact, one of the last things most people want to talk about when the time comes to bury those closest to them, particularly if that time comes unexpectedly soon, is money.

In such circumstances they are extremely vulnerable and can find themselves agreeing to spend a lot more than they bargained for without having much time to collect themselves.

The Consumers’ Association of Ireland (CAI) has been keeping a watchful eye on the cost of funerals for many years and it has consistently warned that closed shops and an absence of price transparency are putting people at risk of being ripped off.

Certainly, the CAI’s figures are alarming. In the mid-1990s, burial costs in Ireland were anywhere between £767 (€975) and £1,475 (€1,870) depending on the location.

Today, a Dublin funeral will cost at least €4,000 with many estimates putting the final bill at closer to €6,500.

Burial outside the capital will cost in the region of €3,000.

How can costs have increased by more than 300 per cent in little more than a decade and should they not now be falling as we are in a sustained deflationary period?

The CAI says one of the main factors driving up burial costs is the lack of new entrants into the funeral parlour market.

The CAI says much of the business in Dublin is divided up between a small number of families, although with many trading under different names, having taken over small competitors, it can be hard for people to see that two neighbouring businesses are actually run by the same family.

Gus Nichols of the Irish Association of Funeral Directors stoutly rejects claims the funeral business in Ireland is a closed shop. He points out that no licence is required to set up a business and says there are “no barriers to entry, none at all”.

He concedes that new entrants have to leap significant planning hurdles with many people reluctant to have funeral parlours located near their homes because of the traffic they generate.

Despite planning difficulties, Nichols says four new funeral home parlours have opened in Dublin over the past two years.

He accepts that funeral parlour prices have not fallen despite our changed economic circumstances but says his own firm has not increased its prices for three years. He also says that people are more likely to shop around for better value and are choosing “more modest packages”.

There are less limousines and fewer flowers being ordered, coffins are less elaborate and there are significantly fewer evening removals in Catholic churches, something Nichols attributes to a combination of a desire to cut costs, an increased disaffection with the church and a reluctance to publicly mourn twice.

He insists that funeral homes have to be upfront and transparent about pricing. “Any funeral director worth their salt has to bring up the issue of costs and, if they don’t, then they have broken our code.

There are circumstances when it can be a very difficult topic to broach, particularly if a family has lost someone in a car accident, but it has to be done,” he says.

There is a State grant of €850 available to cover funeral costs but it barely makes a dent in the cost associated with burial.

The costs are split roughly 60/40 between director’s charges, which cover the coffin, embalming, removal, hearse, pall bearers and other transport; and payments known as disbursements which cover services such as grave purchase, grave opening, cremation fees, newspaper announcements and flowers.

The price of buying and then opening a plot is by far the most significant disbursement, particularly in Dublin, where graves in some cemeteries are being sold for as much as €5,000.

A single plot for immediate use in Glasnevin is €1,825 while an advance purchase costs €3,650.

Then anything between €500 and €1,500 will have to be spent on opening it when the time comes, with cemeteries charging substantially more on weekends and bank holidays.

The rising cost of graves has contributed to the growth in the number of cremations taking place in Ireland although there are only crematoriums in Dublin and Cork.

Up to 30 per cent of funerals in Dublin, or about 2,000 services a year, now involve cremations.

It is a far less expensive option: a typical cremation will cost about €400-€450 compared with a burial costing €1,500, plus up to €1,000 for opening the grave.

The coffin and headstone are the other big spends. Colin McAteer, a funeral director in Donegal, has been in the eco-coffin business for less than a year but he says business is growing stronger with each passing week.

Coffins made from bamboo, wicker, paper mache and cardboard are cheaper than the traditional oak coffins – a wicker coffin will cost in the region of €1,400 – but the market is still niche and people are not primarily motivated by cost but by environmental factors.

“The market is only really starting in this country but, once people get used to them, they will grow in popularity,” he says.

McAteer’s Green Graveyard Co has also applied for planning permission to create a natural graveyard in Co Wexford.

The proposed location is a 7.5-acre site “surrounded by mature chestnut trees” between the villages of Killann and Kiltealy and, if the application is successful, it will help to cut funeral costs for those buried there significantly.

McAteer says “conventional Irish graveyards fall a long way short” of people’s ideal final resting place and his vision is for natural burial grounds which would be “sacred and natural places”.

He says that while “the cost of a double plot would be about €1,500”, the natural burial ground will not use “marble headstones and concrete surrounds that are commonplace in Irish graveyards” and can cost “more than €3,000”.

Instead, graves would be marked by a simple plaque “at minimal cost”.

News that plaques may have had their day is unlikely to trouble Robbie McGowan of Glasnevin Monuments just yet.

He says business this year has been “out the door” despite traditional stonemasons facing increased competition from fireplace retailers, undertakers and even builders who have moved into the stone-cutting business to make up for a shortfall in business elsewhere.

“Money is rarely the most important thing for people,” he says. “People want to do the best they possibly can for their loved ones, whatever the cost.”